The process of rearming Europe is facing serious challenges, revealing a deep divide within the EU, writes The Telegraph. Some countries strive to maintain a strategic partnership with the U.S., while others see this as an opportunity to strengthen European independence.
Financial issues threaten these ambitious plans. Despite a sharp rise in defense company stock prices, the debt burdens of Italy, Spain, and France limit their ability to increase military budgets. Germany, taking the lead, plans to allocate 2% of its GDP to defense, but the EU as a whole needs €800 billion annually for technological modernization and military upgrades.
Economists warn that the overall fiscal stimulus in the eurozone remains weak. GDP growth is expected to be minimal until 2027, and rising bond yields create additional challenges for Mediterranean countries.
Additionally, strategic disagreements further complicate the situation. France aims to increase military spending but faces budgetary constraints. The European Commission has proposed a €800 billion rearmament program, but most of the funds must come from member states. Meanwhile, some countries, including Spain, want to redirect these funds toward climate initiatives.
Industrial policy is another point of contention. Some nations seek to develop their own defense industries using EU funding, leading to competition for contracts. The UK, despite its crucial role in European security, is effectively excluded from the program due to the absence of a defense agreement with the EU.
Instead of a united strategy, Europe is experiencing a chaotic process where national interests outweigh collective goals. As a result, the rearmament program risks becoming ineffective.
